Tess A Limited (TL)
TL is an internet start-up business owned by Tess. Tess owns 80 % of the shares and venture
capitalists own the other 20 %. TL has specialist programmers and coders who create
innovative market research data reports for clients. These data reports have revolutionized
TL’s clients’ ability to understand and respond to customers in their markets. To retain the best
programmers, employees are given cognitive training and are empowered to make decisions
and take risks. They are also regularly praised for the impact that their reports are having on
their clients’ decision making. One day a week, employees can work on their own “dream, but
risky, projects”. Intrapreneurship is strongly encouraged at TL. However, TL lacks the capital
to develop some of these projects into future revenue streams. Virtually, all of TL ’s costs are
fixed – salaries. As of 2019, TL has not yet generated a profit. Without more revenue they
will have to reduce the number of programmers.
Nicole, a new investor, is being considered to provide fresh capital to invest in TL.
Ownership of TL will change to:
Tess 40%
Venture capitalists 20%
Nicole 40%
Nicole believes in intrapreneurship but is concerned that “dream” projects are not generating
profits. She has said that if she is going to invest in TL two conditions must be met:
 Management at TL will change to an autocratic leadership style.
 Programmers will be expected to meet sales targets.
As a result, programmers will have no autonomy.
(a) Outline two features of an autocratic leadership style.[2]
(b) Apply Daniel Pink’s motivation theory to the programmers at TL. [6]
(c) Explain one reason, other than increased sales revenue, why it is important that TL
generates new revenue streams.[2]
(d) Discuss whether Tess should sell Nicole half of her shares with her conditions.[10]